Tax Increment Financing (TIF) is a method of redirecting tax revenues to enable the redevelopment of property that is either: (1) blighted, (2) a conservation area, or (3) an economic development area. The TIF Act authorizes the capture of 100% of the incremental increase in property taxes above the property taxes generated by the property prior to redevelopment, called “payments in lieu of taxes” (PILOTs) and 50% of the new economic activity taxes (EATs) generated from the redevelopment project through sales taxes, earnings taxes, and utility taxes.

TIF is a method to encourage redevelopment of these designated areas. The Missouri TIF law authorizes cities and counties to adopt a redevelopment plan that provides for the redevelopment of a designated area, and to use TIF to fund a portion of the project costs.

The net effect of TIF is to permit a developer to use a portion of property taxes that otherwise would be paid on the completed project to repay all or a portion of the development costs, thereby reducing the net annual debt service on the completed project (and thus increasing the rate of return on the project). In this manner, future tax increases are not abated but rather used to fund costs of the project.

Local Tax Increment Financing - Missouri Department of Revenue 

A Community Improvement District, or CID, is a local special taxing district that collects revenue within its designated boundaries to pay for special public facilities, improvements, or services.  CIDs are created by ordinance of the local governing body of a municipality upon presentation of a petition signed by owners of real property within the proposed district’s boundaries, typically encompassing a commercial, not a residential area.  A CID, although approved by the local municipality, is a separate political subdivision with the power to govern itself and impose and collect special assessments, additional property and sales taxes. CIDs may also generate funds by fees, rents or charges for district property or services and through grants, gifts or donations.  CID annual reports are filed with the Clerk of the creating municipality and a copy filed with the Department of Economic Development.

RSMo Sections 67.1401-67.1571

Commonly referred to as TDD, a Transportation Development District is a transportation project development tool designed to facilitate specific public transportation improvements through the collection of taxes and the borrowing of funds. A TDD has geographical jurisdiction and the revenue of a TDD (most frequently sales tax) can only be used for public transportation and transportation-related improvements.

Summary by Missouri Department of Transportation

RSMo Sections 238.200-238.275

Missouri Chapter 100 industrial development bonds (IDBs) allow local governments to offer personal property and real property tax abatement to companies looking to expand in or relocate to Missouri. Under Chapter 100, the facility, construction materials and certain tangible personal property may be purchased tax exempt by the City and then leased back to the Company.

IDB financing is a useful tool to attract responsible new industries to locate in the area, as well as encourage companies already in the area to remain by assisting them in improving their present facilities or in building new ones. The end result is often a combination of increased job opportunities, existing job retention and large-scale capital investment.

Summary by Missouri Department of Economic Development 

RSMo Section 144.054

Under Missouri Chapter 353, an eligible city or county may approve a redevelopment plan that provides for tax abatement for up to 25 years, thus encouraging the redevelopment of the blighted area. To be eligible for the abatement, the Urban Redevelopment Corporation must take title to the property to be redeveloped.

During the first 10 years of tax abatement, the following may occur:

(1) Up to 100% of the incremental increase in real property taxes on the land can be abated; AND/OR

(2) Up to 100% of the real property taxes on all improvements can be abated; AND/OR

(3) the property owner continues to pay real property taxes on the land in the amount of such taxes in the year before the redevelopment corporation takes title.

During the next 15 years, between 50% and 100% of the incremental real property taxes on all land and all improvements are abated. Payments in lieu of taxes (PILOTS) may be imposed on the Urban Redevelopment Corporation by contract with the city or county, as applicable, to achieve an effective tax abatement that is less than the abatement established by statute.

The Urban Redevelopment Corporation may take title to lots, tracts or parcels of property within the redevelopment area in phases, in order to maximize the tax abatement during a phased redevelopment project.

Summary by Missouri Partnership 

RSMo Chapter 353

State of Missouri - Business Incentive Programs

One of Missouri’s signature programs to help create jobs and investment in Missouri, the Missouri Works program offers achievable, flexible, and competitive benefits to companies investing in Missouri. The retention of the state withholding tax on the new jobs and/or state tax credits, which are refundable, transferable and/or saleable make this a powerful business attraction program for businesses that qualify.

Summary by Missouri Department of Economic Development

RSMo Sections 620.2000-620.2020

Funding can be targeted to include areas such as technical training, quality training, or soft skills training. Missouri companies can choose any combination of service delivery including the use of their own in-house staff, preferred training vendors, or local community colleges.

Summary by Missouri Partnership

Provides a financial incentive for the location or expansion of large business projects. The incentives are designed to reduce necessary infrastructure and equipment expenses if a project can demonstrate a need for funding.

Summary by Missouri Partnership 

RSMo Sections 100.700-100.850

Benefit program that provides state sales tax exemptions to qualifying manufacturing companies. These exemptions are possible on items such as machinery, energy, water, materials and more.

Summary by Missouri Partnership

RSMo Section 144.054

In 2016, Missouri led the nation as the only state that allowed companies to annually select from either three-factor (property, payroll and sales) or single-factor (in-state sales only) income tax apportionment. Today, Missouri is one of only two states to offer this strategic advantage for manufacturing and service companies.

Summary by Missouri Partnership

Provides a tax deduction for expenses associated with eliminating a business located outside of the state and reestablishing it in Missouri.

RSMo Section 143.1100

New or existing Missouri companies looking to embark on locating or expanding their headquarters in the state may be able to access incentives based on the number of news jobs and investment associated with the project.

RSMo Sections 135.100-135.150, and 135.258